United Nations: external review finds problems at procurement department

An independent review has concluded that the U.N. department in charge of purchasing is poorly managed and staff don't know even the basic rules governing their work, according to findings released Tuesday.

The report by the international consulting firm Deloitte said the U.N. Procurement Service, which has come under severe criticism in recent months over allegations of corruption, was too dependent on its staff to make sure purchasing contracts are free from fraud.

U.N. Undersecretary-General for Management Christopher Burnham had ordered the review in August after a procurement officer, Alexander Yakovlev, pleaded guilty to wire fraud and money laundering during his time in the division. A probe of the U.N. oil-for-food program had also implicated Yakovlev in corruption in the Iraq operation.

Burnham said the findings of the latest report underscore need for reform at the United Nations. U.N. Secretary-General Kofi Annan has pushed for widespread management reform but has faced some resistance from the Group of 77, representing 132 mainly developing countries and China, some of whom see the reform push as a U.S.-driven effort.

The United Nations must become "a 21st century organization that fully meets member states' requirements for accountability, transparency and ethical conduct," Burnham said.

Burnham told reporters that the next step in reforming the department would be to intensify a "forensic audit" to determine the exact nature of the problems, whether anyone was to blame, and how much money was lost. He said it would be finished in June.

The procurement service approves the purchase of goods and services for the United Nations. It oversaw US$1.37 billion (Ђ1.2 billion) in contracts for 2004.

Burnham refused to blame anyone for the conclusions in the Deloitte report. But he stressed that it "outlines significant lack of management oversight in the past, and we are reviewing that, and the secretary-general will act swiftly."

Last summer, after Yakovlev pleaded guilty and the oil-for-food probe exposed the flaws in procurement, Annan transferred authority of the division away from Assistant Secretary-General Andrew Toh. The chief of procurement, Christian Saunders, was also switched to a different job.

Both Saunders and Toh insisted that the Deloitte findings were not news to them and they had been trying to fix the problems. "It's all things we had been looking at and were in the process of putting it into place," Saunders said.

The Deloitte report cast the procurement division in a much harsher light than another review ordered by top procurement staff and delivered in June. That document, from the National Institute of Government Purchasing, said that while there were problems, there was strong momentum for reform.

Burnham said he did not back that report's findings because he did not believe it was independent.

Of the institute's earlier report, Toh said, "They're not going to sell themselves for a lousy US$15,000 survey they do for us. That was, I think, a little unfortunate." "Probably there is a desire to show a new zest for reform and that zest gets carried away," Toh said of Burnham's remarks, reported AP. P.T.

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